Finucane v., 2013 MBCA 101

Citation: Finucane v. 3777121 Manitoba Ltd., Date: 20131107 2013 MBCA 101 Docket: AI 13-30-07953 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Madam Justice Holly C. Beard Mr. Justice Marc M. Monnin BETWEEN : ) L. W. Donald and DONNA MARIE FINUCANE ) K. E. Jones ) for the Appellant (Plaintiff) Respondent ) ) D. M. Foerster ) for the Respondent - and - ) ) Appeal heard and ) Decision pronounced: 3777121 MANITOBA LTD. ) November 5, 2013 ) (Defendant) Appellant ) Written reasons: ) November 7, 2013 HAMILTON J.A. (for the Court): [ 1 ] The defendant appeals the dismissal of its

summary judgment motion to dismiss the plaintiff’s statement of claim and the related interlocutory injunction prohibiting the defendant from proceeding with mortgage sale proceedings, pending the outcome of the plaintiff’s action. [ 2 ] The plaintiff and the principal owner of the defendant, Mr. Esler, had a personal relationship for several years. In 2006, the plaintiff purchased the house in which she currently lives. The defendant provided the funds for that purchase in the approximate amount of $45,000.

In 2008, the plaintiff signed a mortgage in the amount of $80,000 in favour of the defendant, and the defendant registered it against the house.

The defendant did not make any advances under the mortgage. [ 3 ] After the personal relationship ended, the defendant commenced mortgage sale proceedings under the mortgage in November 2011. [ 4 ] The plaintiff filed a statement of claim and obtained an interim injunction prohibiting the mortgage sale proceedings from proceeding until her action was resolved. [ 5 ] In her statement of claim, she seeks an order under The Unconscionable Transactions Relief Act , C.C.S.M., c. U20 (the Act ), setting aside the mortgage, general damages and such other relief as the court deems just.

Among the many facts set out in her statement of claim with respect to the personal relationship, the house purchase transaction and her small business, the plaintiff pleads that “she was given the purchase proceeds by the Defendant” to purchase the house and that at that time “there were no express or implied agreements that such purchase proceeds were to be a loan or subject to any repayment whatsoever.” [ 6 ] The motion judge dismissed the defendant’s

summary judgment motion on the basis that there were issues to be determined at trial given the lack of documentation and the contradictory evidence of the plaintiff and Mr. Esler. In his oral reasons, he noted that the mortgage is without consideration, “so far as I can tell.” He concluded that the burden had not been met by the defendant to establish that the plaintiff’s action must fail.

[ 7 ] At the motion hearing, the defendant raised, for the first time in oral argument, that the plaintff’s claim should fail because the Act does not apply. It questions how the plaintiff can rely on the Act when it only applies to loan transactions and the plaintiff pleads that there was no loan transaction. The defendant asserts that the judge did not address this argument. [ 8 ] We are of the view that the plaintiff’s statement of claim is poorly drafted and that the defendant’s argument that the Act only applies to situations involving “money lent” (see the definition and s. 3 of the Act ) has some merit.

Nonetheless, we are of the view that the facts alleged in the statement of claim raise the issues of whether the funds were advanced as a gift and, if not, whether the mortgage was enforceable. [ 9 ] As well, the affidavits filed by both parties raise credibility issues as to what the nature of the transaction was at the time the house was purchased.

The timing of the execution of the mortgage, and the lack of advance of funds under the mortgage, raise issues as to its enforceability. [ 10 ] For these reasons, we are not persuaded that the judge erred in principle or made any palpable and overriding error when he dismissed the defendant’s motion to dismiss the claim and set aside the interlocutory injunction. This was a discretionary decision and we see no injustice created by that ruling that would cause this court to intervene. In fact, we are of the view that the credibility issues here call for a trial of the pertinent issues.

In that regard, we urge the parties to identify these issues more fully by amending their pleadings. [ 11 ] In the circumstances, we dismiss the appeal with costs to the plaintiff. J.A. J.A. J.A.